Microsoft CEO Nadella seeks AI alliance with Hyundai, POSCO, Shinhan, KT

Microsoft Corp. Chairman and Chief Executive Satya Nadella is seeking to forge an artificial intelligence alliance with major South Korean companies when he visits Seoul next month, industry sources said on Tuesday.

His trip to Seoul in late March comes as Chinese AI app DeepSeek causes disruptions globally, posing a threat to leading generative AI models such as OpenAI’s ChatGPT.

Nadella's visit to the Asian country is timed around the Microsoft AI Tour in Seoul on March 26, a gathering of tech developers and IT professionals – his first Seoul trip since November 2022.

During his stay in Seoul, the Microsoft chief will have a town hall meeting with leaders of Korea’s major companies, in which he is expected to propose an AI partnership with them, people familiar with the matter said.

Sources said Nadella has offered to meet with Hyundai Motor Co. Chairman Chung Euisun; Chang In-hwa, chairman of POSCO Holdings Inc., the parent of Korea’s top steelmaker POSCO; Shinhan Financial Group Chairman Jin Ok-dong; and KT Corp. CEO Kim Young-shub.

A scheduling conflict may arise as Shinhan Financial Group has its annual shareholders’ meeting on March 26, they said.

GROWING NEED FOR AI ALLIANCE

During his meeting with Korean business leaders, Nadella is expected to unveil his vision for AI development in collaboration with leading Korean companies in the manufacturing, banking and telecommunications sectors.

Sources said he is preparing to deliver a keynote speech on how AI can overcome technological limitations in traditional industries.

In January, China’s DeepSeek rattled global markets by claiming that its AI model is trained at a fraction of the cost of leading AI players and on less-advanced Nvidia chips.

DeepSeek’s announcement sparked an aggressive AI-related stock sell-off and considerable debate over whether large tech firms are spending too much on AI infrastructure.

The Microsoft chief is expected to address tricky issues surrounding DeepSeek and US AI models during his stay in Seoul, sources said.

PARTNERSHIPS WITH KOREAN FIRMS

Last May, Nadella met with senior executives of Samsung Electronics Co., SK Hynix Inc., LG Electronics Inc. and SK Telecom Co. during the MS CEO Summit 2024 in Redmond, Washington to explore business opportunities in AI chips, AI-powered home appliances, advanced telecommunications and cloud services.

Four months later, Microsoft and KT forged a five-year multibillion-dollar strategic partnership for AI transformation at the telecom company.

The deal followed the two companies’ agreement signed in June to cooperate in AI, cloud and information technology to propel Korea’s AI and cloud innovation.

According to global market research firm IDC, the Korean AI market is forecast to grow to 4.5 trillion won ($3.1 billion) by 2027 from 3 trillion won in 2024.

Write to Jae-Won Park, Ji-Eun Jeong and Woo-Sub Kim at wonderful@hankyung.com

In-Soo Nam edited this article.